Grant Corporation The following information is available for Grant Corporation for the current month:

Normal spoilage (discrete) 1,100 units

Abnormal spoilage 900 units

Ending WIP (70% complete) 13,000 units

Transferred out 72,500 units

Beginning Work in Process Costs:

Material $10,400

Conversion 13,800

Current Costs:

Material $120,000

Conversion 350,000

All materials are added at the start of production and the inspection point is at the end of the process. Refer to Grant Corporation.What is the cost assigned to abnormal spoilage using FIFO?

Question

Grant Corporation The following information is available for Grant Corporation for the current month:

Normal spoilage (discrete)		1,100 units
Abnormal spoilage		900 units
Ending WIP	(70% complete)	13,000 units
Transferred out		72,500 units
Beginning Work in Process Costs:
	Material	$10,400
	Conversion	13,800
Current Costs:
	Material	$120,000
	Conversion	350,000

All materials are added at the start of production and the inspection point is at the end of the process. Refer to Grant Corporation.What is the cost assigned to abnormal spoilage using FIFO?

Quizplus · Accepted Answer

Under FIFO, only the current period costs are considered for abnormal spoilage. The cost per unit for conversion is calculated using the current conversion costs divided by the equivalent units for conversion. The abnormal spoilage units are multiplied by this cost per unit to find the total cost assigned to abnormal spoilage.

Grant Corporation the Following Information Is Available for Grant Corporation for the for the Current